Exam 5: Cost Allocation and Activity-Based Costing Systems

John Gordan Company had the following activities, traceable costs, and physical flow of driver units: The above activities are used by departments A and B as follows: -What is the cost per driver unit for the account verification activity?

Boone Manufacturing has two production departments, Mixing and Finishing, served by one maintenance department. Budgeted fixed costs for the maintenance department for 20X3 were $20,000, and the variable cost per labour hour was $3.00. Other relevant data for 20X3 are as follows: Actual maintenance department costs for 20X3 were $24,000 fixed and $50,000 variable. ^*in labour hours -The amount of variable maintenance costs allocated to the Finishing Department should be

Packaging is an example of a service department.

Stohr Company has two departments, New and Old. Central costs are allocated to the two departments in various ways. Relevant information is presented below: -If total payroll processing costs are $64,000 and they are allocated on the basis of number of employees, the amount allocated to the New Department should be

Boone Manufacturing has two production departments, Mixing and Finishing, served by one maintenance department. Budgeted fixed costs for the maintenance department for 20X3 were $20,000, and the variable cost per labour hour was $3.00. Other relevant data for 20X3 are as follows: Actual maintenance department costs for 20X3 were $24,000 fixed and $50,000 variable. ^*in labour hours -The amount of variable maintenance costs allocated to the Mixing Department should be

The greatest virtue of the direct method is

City Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the direct method is used to allocate costs, the total cost of the Mixing Department after allocation would be

County Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage, while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the direct method is used to allocate costs, the total cost of the Mixing Department after allocation would be

Which of the following departments is NOT a service department?

Henry Company has three support departments and two producing departments. Information for each department for 2006 is as follows: Plant administration costs are allocated based on direct labour hours. Allocate the support depart ment costs using the sequential (step) method starting with the support department with the greatest total cost. Then calculate the predetermined overhead rates the producing departments would use to apply overhead to units of product.

The time from initiating production to delivering the goods to the customer.

County Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage, while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the step-down method of allocating costs is used, and the Personnel Department renders the greatest service, then the total amount of overhead that would be allocated from Maintenance to Mixing is

Stanley Corp. manufactures two models of its roasting pans, a standard and a deluxe model. Three activities have been identified as cost drivers and the related costs pooled together to arrive at the following information: -If activity-based costing is used, then the total amount of overhead allocated to the standard model would be

The goal of activity-based costing is to trace costs to products or services instead of arbitrarily allocating them.

A system that first accumulates overhead costs for each of the activities of an organization, and then assigns the costs of activities to the products, services, or other cost objects that caused that activity.

County Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage, while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the step-down method of allocating costs is used, and the Personnel Department renders the greatest service, then the total amount of overhead that would be allocated from Maintenance to Finishing is

Allen Crabb Corporation had the following activities, traceable costs, and physical flow of driver units: The above activities are used by departments X and Y as follows: -How much of the account verification cost will be assigned to Department Y?

The reciprocal method of allocating service department costs fully recognizes services that service departments provide to each other.

Another term for cost application is

City Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the step-down method of allocating costs is used, and the Personnel Department renders the greatest service, then the total amount of overhead that would be allocated from Maintenance to Mixing is